Part II. Problem Section-ANSWER ANY TWO (15 POINTS EACH-OR MORE FOR EXTRA CREDIT) 13. Exhibit 8-7 A firm's cost and MR curves Cost, revenues (dollars) 22 22 MC ATC MR 20 Quantity A. In Exhibit 8-7, if this firm is currently producing 20 units of output, this firm, is at its profit-maximizing point. b. could increase profits by increasing output. c could increase profits by decreasing output. d. should shut down. o should decrease price. B. In Exhibit 8-7, if this firm is currently producing 20 units of output, this firm is at its profit-maximizing point b. is losing $20. is earning a total profit of $60. d should shut down. L is earning a total profit of $3. C. In Exhibit 8-7, if this firm is currently producing 20 units of output, this firm is at its profit-maximizing point. b. is earning a $3 profit on each item sold. c. is losing $3 on each item sold. d. should shut down. e is earning a total profit of $3. D. In Exhibit 8-7, if this firm is currently producing 20 units of output, this firm 4 b. C is at its profit-maximizing point. could increase profits by increasing output. could increase profits by decreasing output. d. should shut down e should decrease price E. In Exhibit 8-7, the existence of a totally elastic MR curve is indicative of a a monopoly b. collusive oligopoly c. cartel d. monopsony e. none of the above